What does divorce mean for life insurance beneficiaries?

Laws that govern divorce, also known as family law, vary from state to state.  Beneficiaries of a life insurance policy may be the spouse from whom you are separating, as well as your children.  The general rule is that in many states divorce does not affect a beneficiary designation in a life insurance policy, however, in some states it does. Read on to find out how.

Life Insurance Beneficiary Rules after Divorce

Will your spouse still be a beneficiary?

If your spouse is a beneficiary some states recognize a legal doctrine called an automatic revocation by implication, which means that death benefits that the divorced parties could receive by virtue of their union is revoked.  In other words, the ex’s beneficiary designation is automatically revoked by their divorce.

If there is an express provision in the deceased’s will or otherwise that states a divorce order will not revoke rights that the spouse had in an insurance policy, then this automatic revocation is less likely to be effective. Also, federal ERISA law governing employment life insurance can supercede state law.

If you believe you should be a beneficiary of your ex’s life insurance policy but your claim was denied, contact an experienced life insurance beneficiary attorney to help you with your case.  We get our clients paid.

Will your spouse’s dependents be beneficiaries?

Some families use irrevocable beneficiaries in insurance policies so that the support recipient has funds to support dependents in case the support obligor dies. This designation is sometimes given as a part of a separation agreement or divorce settlement.

The details of such a term, if later there is controversy, may be resolved in court. In some states, if the deceased had wished the ex-spouse to remain a beneficiary after divorce, he would have to expressly rename the ex-spouse as the beneficiary after divorce.

Because in most insurance policies, the insured retains the contractual right to change beneficiaries at any time, there is no legal right on the part of the beneficiary to the proceeds.  If there is a separation agreement or prenuptial agreement in place that requires a spouse to have life insurance, only then is there a legal right in the proceeds of the policy. The life insurance divorce beneficiary can be the ex-spouse under these circumstances.

Divorce and Life Insurance Policies

If the divorce is still pending, and there are court orders prohibiting parties to convey or dispose of property, changing beneficiaries might not apply to the prohibition.  

If in the separation agreement between two parties, a term states that divorce will eliminate any right or interest the ex-spouse has to life insurance proceeds, then the failure of the deceased to designate a new beneficiary will not render the term inoperable:  the ex-spouse will still have no interest.

The contingent beneficiary to your life insurance policy is still entitled to receive proceeds in the case that the primary beneficiary (the ex-spouse) is no longer entitled.  However, if there is a manifestation of intent on the part of the insured that the contingent beneficiary should not have rights to the proceeds (for example, if there is language in the policy that the contingent beneficiary may only receive proceeds after the death of the primary beneficiary), then the contingent beneficiary may not have access to the proceeds.  In the case where there is no explicit language of preconditions, then the contingent beneficiary will be qualified to receive the proceeds after the divorce.

Questions about life insurance and divorce?

Life insurance is a legal contract and must be evaluated with your specific situation in mind. For example, we were able to get a client beneficiaries paid when the divorce decree specifically provided that the insured’s policy was to name his dependents as beneficiaries in a specified amount as long as support was being paid.

For a consultation about the legal implications of divorce on your insurance policies, call the offices of Boonswang Law at  (215) 940-8900 or visit out website for more information about life insurance beneficiary divorce.

Written By: Chad Boonswang
Chad G. Boonswang, Esquire is a litigation lawyer based in Philadelphia, PA. Selected as an ASLA 2014, 2015, 2016, 2017 and 2018 Top 100 Litigation Lawyer, Mr. Boonswang plays to win. As a lawyer, athlete, and scholar, he has always put in the energy, time, and commitment to be the best. After working for several prominent law firms in Philadelphia, including Montgomery McCracken Walker & Rhoads LLP, he founded his own practice in 2002.  Since then Chad has recovered tens of millions of dollars on behalf of his clients from life insurance claims and catastrophic injury cases.  Year after year, he has earned a 10.00 Superb rating on Avvo.

Not Getting Paid Your Life Insurance Benefits?

Talk to a life insurance lawyer at no cost.